Industrial Internet of Things, the unused opportunity

Internet of Things (IoT) has already spent few years at the peak of Gartner’s hype cycle. Common consensus is, that IoT – and IIoT in industrial environment – has a lot of potential, but somehow it does not seem to come down to the day-to-day business level. So why something, which is seen to bring clear business benefits in improving efficiency, creating new revenue through new products/services and even enable totally new business models, is adopted so slowly by companies? Let’s explore few possible reasons behind this.

1) Is IIoT so new, that companies do not know it?
IoT has actually been around for decades – it was already late 90’s when Finnish forest machine producer, Ponsse, produced real-time information for logistics of log trucks, factories and machine maintenance. In addition, remote monitoring, data gathering and controlling have been around for years. The fresh development is that with new technologies and products, IIoT is entering industries where it traditionally has not been. In fact, IIoT can be said to be applicable to almost any industry sector! So, there surely are companies which are not yet fully aware of all of IIoT’s potential, but as a whole I cannot see that slow adoption would result from lack of knowledge.

2) How about technology – is it hindering progress?
IIoT technologies are developing rapidly and constantly enabling fresh new solutions and applications. So far I have not seen too many cases, where lack of technical solution would have prevented a company proceeding with its IIoT plans. Additionally, rapid technical development has significantly reduced costs e.g. a system, which was still few years ago tens of thousands can today be acquired in tenth of the earlier price.

However, one clear technology related drawback is the lack of widely accepted standards. Without, for example common interface standards, one can’t know the life-time of multi supplier solutions. On the other hand, cost reductions have dramatically shortened solution pay-back-times, making short-term investments justifiable. With that in mind, it is hard to see technology or the cost of it being the reasons for IIoT not gaining foothold at faster pace.

3) Could the reason be difficulty in changing current practices?
IIoT helps to get new information and real-time understanding of company’s own operations, its products’ performance, its customers and – actually – from the whole surrounding eco system. The value of IIoT investment come from (a) how well company can use new information in decision making and (b) how IIoT helps in carrying out those decisions. When adopting IIoT the current way of doing things is often too slow or perspective too narrow for a company to make most out of IIoT. Capitalizing the value of IIoT is not only about deploying ‘novel tools’, but it also requires changing the current way of doing business. Not moving on from the status quo is – in my opinion – the most significant factor hindering the breakthrough of IIoT!

And the above is supported by numerous company discussions, which tend to proceed through three steps. First there is suspicion (is IIoT really for us?) then enthusiasm (great potential) and then stagnation. In the last phase IIoT is ‘on the table’ – there are pilots and testing, but decisions on real volume deployments are pending. Perhaps the stagnation comes after realization that to get most out of IIoT requires ‘leaving the comfort zone’, changing something which is working, taking risks and learning new …

In practice, there is seldom a single reason why companies are proceeding slowly – it is always a combination of several factors. I’d like to raise everyone’s attention to that ‘when thinking IIoT, companies are too reluctant to question and change their current practices’. I see IIoT as a classical example of an opportunity, where company can be a forerunner – and make most out of it in boosting its business – or be a late comer fighting for its existence!